Integrated inventory control and transportation decisions under carbon emissions regulations: LTL vs. TL carriers

• A retailer’s integrated inventory control and transportation problem is formulated.
• Economic order quantity model is considered with a LTL carrier and a TL carrier.
• Carbon emissions regulation policies are modeled for the problem of interest.
• A solution is discussed for each model with each carrier option.
• Numerical studies are conducted to give sensitivity analyses and carrier preferences.

This study analyzes an integrated inventory control and transportation planning problem with carbon emissions regulations. We investigate the economic order quantity model with less-than-truckload (LTL) and truckload (TL) transportation under carbon cap, cap and trade, cap and offset, and taxing policies. We find the retailer’s optimal order quantity under each regulation with LTL and TL carriers. Analytical and numerical results comparing LTL and TL carriers are documented. We illustrate that the retailer’s carrier preference depends on regulation parameters. The tools provided enable analyzing the effects of regulations, transportation costs and emissions on the retailer’s costs and emissions with each carrier.